Contemporary Centres of Power

Written and reviewed by Subhra Gupta, Humanities faculty at UniDrill (M.A. Sociology, University of Delhi · 7 years teaching Humanities). Based on NCERT Political Science Class XII (Contemporary World Politics), Chapter 2.

Can a currency, a trade zone or a passport rule be a form of power?

After the Soviet bloc collapsed, the world looked unipolar, with the United States as the sole superpower. Yet power is not only about missiles. A bloc of countries that trade freely, use one currency and let you cross borders on one visa can shape the world just as much. The chapter studies three such alternative centres of power that could check American dominance: the European Union, ASEAN and China, plus short profiles of Japan and South Korea.

The European Union

Why Europe integrated. After 1945 Europe lay in ruins and was divided by the Cold War, and the Cold War itself pushed integration forward. The United States gave massive financial help through the Marshall Plan, created NATO as a collective security structure, and set up the Organisation for European Economic Cooperation (OEEC) in 1948 to manage the aid. The Council of Europe, formed in 1949, was the first step towards political cooperation. Integration then moved slowly from the economic to the political.

The collapse of the Soviet bloc speeded things up. The EU now has its own flag (a circle of twelve gold stars on blue), anthem, founding date and currency, the euro. It has moved from being mainly an economic body to an increasingly political one. Attempts to give it a Constitution failed.

Beyond the textbook. For the exam: the Maastricht Treaty (1992) created the European Union and the EU had 28 members by 2013. In reality: the UK left the EU on 31 January 2020 after the 2016 referendum, so the Union now has 27 members. The 28 member figure belongs to the 2013 to 2020 period. When a question asks about the state of the EU in the years the chapter covers, use the dates in the timeline.

The EU as a centre of power.

Limits. The EU is not a single state, and public opinion is divided. Euroscepticism is widespread. Britain, under Margaret Thatcher, was reluctant about deeper integration. Denmark and Sweden resisted the Maastricht Treaty and the euro. In 2016 Britain voted to leave in the referendum known as Brexit, with 51.9 per cent voting to leave.

Pause and predict: the Maastricht Treaty created the European Union, but not every member accepted every part of it. Which two countries does the chapter say resisted both the treaty and the euro?

Check your answer: Denmark and Sweden, which resisted the Maastricht Treaty and the euro. This fits a pattern the chapter highlights: integration moved forward even though some members preferred to keep their own currency and policy.

ASEAN: the Asian contrast

ASEAN (Association of South East Asian Nations) was set up in 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand through the Bangkok Declaration. Later Brunei Darussalam, Vietnam, Lao PDR, Myanmar and Cambodia joined, making ten members. Its main aims are to speed up economic growth, social progress and cultural development, and, secondarily, to promote regional peace and stability based on the rule of law and the UN Charter.

ASEAN has little interest in supranational structures. Its distinctive style is the ASEAN Way: informal, non-confrontational and cooperative interaction, with deep respect for national sovereignty.

ASEAN also has a record of diplomacy. It helped bring about an end to the conflict in Cambodia and helped resolve the East Timor crisis, and it set out Vision 2020 for an outward looking role. The ASEAN Economic Community aims at a common market and a better ASEAN Dispute Settlement Mechanism.

India and ASEAN. India has signed free trade agreements with Malaysia, Singapore and Thailand, and the ASEAN India FTA came into effect in 2010. India's Look East policy began in the early 1990s and was extended as the Act East policy from 2014.

Two views. For the exam: the ASEAN Way, with its informality and respect for sovereignty, has helped keep the region stable and gave ASEAN a role in diplomacy. Another reading: analysts also point out that decisions by consensus and a strict policy of non-interference make it harder to enforce decisions or to settle disputes quickly. That is why the ASEAN Economic Community's work on a dispute settlement mechanism matters. The two readings describe the same feature: it keeps members together, and it limits what the group can do.

The rise of the Chinese economy

The People's Republic of China was founded in 1949 under Mao Zedong. Its economy followed the Soviet model: state owned heavy industry funded by farm surplus, import substitution and little contact with the capitalist world. By the early 1970s, per capita income was very low and the economy faced a crisis similar to that of the Soviet system.

China did not use shock therapy. Trade barriers were removed only inside Special Economic Zones (SEZs), areas meant to attract foreign capital and technology, and the state kept a central role throughout.

China became the world's most important destination for foreign direct investment, and large foreign exchange reserves allowed it to invest abroad. The costs are also noted: about 100 million people unemployed, poor conditions for women workers, environmental damage, corruption and widening gaps between urban and rural and between coastal and inland areas.

Beyond the textbook. For the exam: China re-established contact with the United States in 1972, and Zhou Enlai proposed the four modernisations in 1973. In reality: Nixon's 1972 visit began the thaw, but full diplomatic relations between the United States and China came only on 1 January 1979. This is a reminder that the reform era (1978) and the opening to the West were closely linked in time.

Pause and predict: why did China avoid the sudden fall in output that Russia suffered in the 1990s?

Check your answer: China kept state control, opened trade step by step inside SEZs and privatised in stages, so there was no overnight collapse of industry and the currency. The comparison is a favourite statement question.

India and China

Recent strains are linked to border disputes, India's objections to the China Pakistan Economic Corridor, and differences over terrorism-related issues at the UN. The overall picture the chapter draws is of two neighbours that cooperate economically while remaining wary on security.

Japan and South Korea

Exam traps

60-second revision

Where this chapter connects

• Previous: The End of Bipolarity explains the collapse of the Soviet bloc that opened the space for these centres, and compares shock therapy with China's path.
• Next: Contemporary South Asia moves from the larger centres of power to India's own region.
• Related: India's External Relations covers the 1962 conflict, and Globalisation covers the economic forces behind trade blocs.